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I am behind on one of my store credit cards and I received a letter from them offering to reduce my balance by 30% if I agree to make 6 monthly payments to pay off the account. I can make the payments they suggested but I have a question about one of the statements on the offer. It says "Your account will be reported to the credit bureaus as "Account legally paid in full for less than the full balance".

What does that do to your credit score and the ability to get credit in the future....

I would like to make this kind of arrangement with some other creditors but I want to know how this will effect me later.

I am not worried about the immediate future since I am behind anyway and my score is not the best but I am thinking a couple of years down the road.

It will lower your score some compared to if you paid the entire balance in full. It is more of a gray mark than anything. Overtime your score will go back up if you keep current on other credit items like home and auto. Personally my goal is to eliminate all my debt which would make my FICO score 0 eventually. Frankly, you don't need a FICO score if you aren't applying for a bunch of junk debt and any bank worth doing business with would loan money for a house to someone that had 20% down and a 0 score due to not having any other outstanding debt.

Sub: #1 posted on Thu, 09/04/2008 - 09:36

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unfortunately they won't, FICO must run the country :(

Sub: #2 posted on Thu, 09/04/2008 - 10:08

smo65d11 smo65d11

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Some banks rely only on that score but others will look beyond the score especially credit unions. I am pretty sure all of them check it. I don't know what my score was when I bought my last home but at that point I had no debt including car or credit card. I doubt it was zero though because I paid off a car loan and credit cards 5 years prior to the purchase of my current house. Unfortunately my credit score is bad now though because of my wifes shaninigans.

Sub: #3 posted on Fri, 09/05/2008 - 06:35

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